According to Bloomberg’s source, Tesla is reportedly ready to deploy software updates in China to introduce FSD (Full Self-Driving) features, which will be rolled out in phases across different models.

According to reports, informed sources reveal that Tesla is preparing software updates for Chinese customers to provide driving assistance features similar to those available in the US market under the "Full Self-Driving" (FSD) system.

These updates, planned for the near future, will allow Tesla owners to use the driving assistance features on urban roads.

With the update, Tesla vehicles will reportedly be able to autonomously drive onto exit ramps and intersections, recognize traffic signals, make turns, and handle lane and speed changes.

These FSD features are similar to supervised FSD currently deployed across the United States, Canada, Puerto Rico, and Mexico.

On January 30, Elon Musk had shared that during the company’s Q4 earnings call that supervised FSD would be made available in nearly all markets, including China, in 2025.

Moreover, unsupervised FSD would roll out by end of 2026 across the United States.

He also revealed that the current challenge Tesla faces is regulatory and not technical, as the company is not allowed to transfer training video outside of China.

At the same time, “the U.S. government won’t let us do training in China”, effectively creating a very complicated regulatory path to FSD deployment.

To address this quandary, Tesla is using publicly available videos of Chinese streets, including street signs and traffic regulations, and feeding those to their training models.

One specific example highlighted by Musk is the complexity of bus lanes in China. These lanes have specific hours during which vehicles are allowed to use them, and entering a bus lane at the wrong time results in an automatic ticket.

To address this, Tesla's simulator must be able to accurately read signs, understand the time of day, and navigate accordingly.

Musk emphasized that despite these challenges, “we're gonna put that into our simulator train on that, the car has to no what time of date is, read the sign, we will get this solved."

A research report from CICC points out that 2025 is expected to be a year of significant development for advanced driver-assistance systems (ADAS), with two main trends: the gradual completion of L2+ functions and the start of L3 functions at leading automakers.

The report also highlighted the the potential positive catalysts for ADAS as Tesla officially enters China with FSD and the Robotaxi.